Postal banking

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Wednesday September 21 2016

Why a postal bank?

Canada needs a postal bank because:

(1) A postal bank is a policy option that has been tested and used very successfully in over 60 countries which have postal banks and can be a win for both Canada Post Corporation (CPC) and for Canadian citizens.

(2)  A postal bank can provide an important new revenue stream to Canada Post which can help support other key services such as home mail delivery. Many major businesses use profitable services to support other services which may need extra funds.

(3) A postal bank can also provide some answers to weaknesses in the current Canadian banking system and can be a bank with a mandate for real inclusion, including providing services to unserved or underserved rural and urban areas, answering the high costs of basic banking services, helping millions of unbanked low income citizens, offering an antidote to payday lending at usurious interest rates, establishing services for Indigenous communities and services to municipalities, NGOs and social economic organizations for social housing and other development projects, as well as providing low or no cost remittances for immigrant communities.

(4) A postal bank can be quickly put into place because Canada Post already has the infrastructure, the staffing and the products and technology to adapt to offering a wider range of financial services. Canada Post has 6,300 offices and over 64,000 employees and is already providing some financial services. Canada Post thus has the ability to make a fairly rapid transition to providing a wide range of financial services.

(5) A postal bank could become part of the transformation of the post office branch into a real centre for delivering community power. A post office location offering banking could be able to help in the environmental revolution needed by offering loans for environmental refit for housing and businesses.

(6) A postal bank already has widespread support across Canada. Over 600 municipalities support postal banking. Polls show so do a majority of Canadians. Canada Post management in the past has also been in favour of financial service expansion and a secret CPC management study appears to endorse postal banking.

 

Let us examine these 6 points one by one.

(1) A postal bank is a policy option that has been tested and used very successfully in over 60 countries which have postal banks and can be a win for both Canada Post and for Canadian citizens.

Canada and the USA are one of the few large geographic areas of the world without a postal bank. The Canadian postal bank which had lasted for 100 years after Confederation was closed in 1968.  The US Postal Savings system lasted from 1911-1967.

But all around the world postal banking is flourishing with over 60 postal banks. World-wide in 2010, postal operators held over 1.6 billion savings and deposit accounts.[1] If an average postal client has 1.5 accounts, this means there are more than 1 billion people banked through post office financial services. Some 93% of postal systems now offer financial services. 

Some of the biggest and most successful banks are postal banks. The #8 largest bank in the world in 2016 is the Japan Postal Bank.[2] The #25 largest bank is the Postal Savings Bank of China (PSBC), which has recently received a $500 million USD investment from the federally owned Canada Pension Plan (CPP) Investment Board.[3] The PSBC with more than 400 million retail customers and nearly 40,000 branches, is China’s largest bank by customers and distribution network and is the sixth largest bank by total assets in China. This investment was made by the CPP because postal banking works and is very profitable.

 

New Postal Banks Emerging

It is also important to note that the huge growth in postal banking is not just something which occurred in the past. The five postal banks we will focus on below all grew mainly in the last decade. As well there are a whole series of new postal banks coming on board in the next period. 

    • The largest of these, and soon to be the largest banking network in the world, is the new Indian postal bank which will be operational in March 2017. It will soon have 22,000 branches and 150,000 postal staff doing banking as well as mail delivery. The India Post Payment bank will also move into the 139,000 rural post offices creating a huge network.[4]
    • The Postal Services of Portugal opened a new bank last year and planned 50 branches in post offices in 2016. [5]
    • A new joint partnership between Russian lender VTB and the Russian Post Office will create  the new Pochta Bank in 2016 [6]

 

Postal Banks are profitable

Around the world, postal banks are generally profitable and contribute a large part of the profits and revenues of post office systems. Also what is important to note is that successful postal banks are found in different size countries, big and small, in countries with very successful banking systems, as well as those with less developed systems,  and in countries with all kinds of political systems and all kinds of parties in power.  A 2013 study Why Canada Needs Postal Banking particularly examined the success of postal banking in 5 countries, including Switzerland and UK both of whom have a very important banking sector similar to Canada’s, France with a banking system with large co-op or credit union bank sector, New Zealand with mainly foreign owned banks and Italy with perhaps the oldest continuous banking system in the world. Looking again at these 5 countries with 2015 annual results, all five postal banking systems have been very successful.

 

First the 2013 results

Table: Figure 1 – Summary of Postal Banking Models and Services in the UK, France, Italy , Switzerland and New Zealand 

Now the results for 2015

Bank and Country

Profit of financial services

Group profit

% Profits/sales of banking of total group results

Swiss Postfinance

577 million SF

823 million SF

70.1%

Kiwibank, New Zealand

$132 million

$143 million

92% profit

Banque Postale, France

707 million Euro

675 million Euro

104%

BancoPosta, Italy

930 million Euro

880 million Euro

105.6%

Post Office Money, UK

£290 sales out of total sales of £976 million

£100 million After £160 subsidy

29.7% of sales revenue

Best practices from world postal banks

Starting a new postal bank in Canada means we can borrow and copy the best practices from postal banks around the world. Here are some of the examples we could potentially copy and adapt to our own needs.

Low income inclusion: The Banque Postale has special programs designed for those in a fragile financial situation. The UK Post office offers no interest credit cards for 27 months and no fees on small overdrafts.

Rural and regional inclusion: The Italian Post Office Bank Bancoposta has a subsidiary Banca del Mezzogiorno-Mediocredito Centrale SpA  which provides support for creditworthy companies operating in southern Italy, through its lending activities and by promoting and facilitating access to government subsidies.[7]

Competitive bank rates: The UK Post Office chequing account fees are some of the lowest in the UK and helped to keep other banks also with lower fees.

Indigenous inclusion: The New Zealand postal bank Kiwibank offers special mortgages to Maori customers which are based on communal land ownership.  

Social housing and low income housing: The Banque Postale makes a particular point of loaning money to social housing projects. The Kiwibank has set up mortgages for multiple owners on the same house which allows low income groupings to purchase property in a much easier fashion.

Municipal and regional funding: The Banque Postale has become the top lender to local municipalities  and to hospitals at 25% of the French total, lending over 8.6 billion Euros last year. [8]  

Social economy, mutuals and co-operatives: The Banque Postale has targeted social economy institutions as a neglected sector for banks and has moved to offer full services to this sector.

Partnerships with banks and other institutions. Most of these banks deliver services themselves and offer other services in partnership agreement with other banks or credit unions. For example, Swiss Post Finance mortgages are offered by a private bank.

Postalbanks have a home banking system and can use the latest technology. The BancoPosta uses its cell phone network to deliver banking services and has a large network of rechargeable banking cards. The new postal bank in India[9] promises to arm all post office deliverers with an I-Pad and a smart phone to carry out banking at your doorstep.

 

(2)  A postal bank can provide an important new revenue stream to Canada Post which can help support other key services such as home mail delivery.

Many major businesses use profitable services to support other services which may need extra funds.

All the postal banks we have studied are profitable and are helping postal systems balance the books as we have shown. But Canada Post would not be the only company offering financial services when this is not the only thing it does or its so-called “core business”.

Many Canadian companies with far fewer locations across Canada have been successful in terms of offering financial services. President’s Choice, Walmart and Canadian Tire (CT) all have very profitable banks.

Let us look at one example. Canadian Tire now has a chartered bank which offers not only a MasterCard but offers high-interest savings accounts, tax-free savings accounts (TFSAs), and guaranteed investment certificate (GIC) deposits as well as insurance products. Financial services earned profits of $374 million before taxes for CT in 2015. Total profits for CT before taxes were $1001.3 million. In other words, financial services earned 37% of Canadian Tire profits.[10]   

(3) A postal bank can also provide some answers to weaknesses in the current Canadian banking system and can be a bank with a mandate for real inclusion, including

    • providing services to unserved or underserved rural and urban areas,
    • answering the high costs of basic banking services,
    • helping millions of unbanked low income citizens,
    • offering an antidote to payday lending at usurious interest rates,
    • establishing services for Indigenous communities,
    • providing services to municipalities, NGOs and social economic organizations for social housing and other development projects,
    • offering low or no cost remittances for immigrant communities.

 

Record Profits for Banks

The Canadian financial sector is a highly profitable sector. The total profits for the six largest banks for fiscal 2015 were over $34 billion dollars.[11] The total profits in 2011 were $25.46 billion. So 2015 banking results represent a $9 billion profit increase in only 4 years.[12] These figures tend to indicate there is certainly room for more competition with lower prices in financial services in Canada.


Canadian big 6 banks' profits ($B)

Fiscal 2015Fiscal 2014
Royal Bank$10.03$9.00
TD Bank$8.02$7.88
Scotiabank$7.21$7.30
BMO$4.41$4.33
CIBC$3.59$3.22
National Bank$1.62$1.54
Total:$34.88B$33.27B

But while Canada’s banks are doing very well overall, if gauged only by the bottom line, we submit that the banking system has many weaknesses to which a postal bank could help offer solutions. Here are some of them.

Decline of bank and credit union branch numbers: While the Canadian banking system, including the credit unions, has around 9,000 branches, many communities and groups are not, no longer or poorly served by a bank or credit union.

The number of bank branches has been declining dramatically over time. In 1990, there were 7,964 bank branches in Canada. Today there are now only 6,348 bank branches, a 20% decline.[13] As for credit unions, the recent decline in branches has been even steeper. There were a total of 3,603 credit union and caisse locations in 2002.  There are now, in 2015, 1,819 credit union locations and 795 Desjardins caisse populaire locations in Quebec and Ontario and 51 caisses in the Maritimes. [14] This means there are in 2015 a total of only 2,665 credit and caisses locations for a decline of 26% since 2002. 

 

Rural Canada

The argument is often made by some of those opposing postal banking that even with the decline in branches, we still have enough banking locations in Canada. But a study in 2014, which surveyed 3,326 communities in small town and rural Canada, all which have a post office, showed that, of the more than 2,600 communities which responded, some 45% of them have no bank or credit union branch.[15] So much for the idea that every community has a banking location.

 

Rural Post Offices Surveyed on Financial Services 2014[16]

Provinces and territories

Total

No bank or credit union

% Communities with no bank or credit union

British Columbia

176

107

61%

Alberta

211

60

28%

Saskatchewan

322

144

45%

Manitoba

177

85

48%

New Brunswick

111

55

50%

Nova Scotia

157

102

65%

Newfoundland and Labrador

255

215

84%

Prince Edward Island

27

16

59%

Ontario

457

202

44%

Quebec

718

189

26%

Nunavut

3

1

33%

Yukon

6

2

33%

Canada

2620

1178

45%

 

 

Bank branches are still well used and so we need more banking locations

Yet another argument used against postal banking is that people now do all their banking on line and do not use bricks and mortar branches. First of all, a recent survey by the Canadian Credit Union Association shows that most bank customers and credit union members still visit branches on a regular basis and that visits by bank customers have increased rather than decreased in the last four years. Credit unions have a higher visit percentage than banks but banks still receive a lot of visits.

Table: Use of Branch (not ATM) Channel by Financial Institution

While Internet banking has become the preferred method for most but not all Canadians[17], the banks themselves realize that branches are still very important centres for major transactions and advice.[18] Scotiabank’s James McPhedran, executive vice-president of retail distribution noted: “People are not going into branches as much as they used to. ..But we’re having a significantly higher number of advice conversations in our branches now. They are relevant and they are where big things happen.”[19] The Bank of Montreal (BMO) confirmed “74 per cent of customers prefer to open an account in a branch; 85 per cent prefer to visit branches to buy mortgages.” While CIBC’s said: “...though 77 per cent of Canadians believe that remote banking is important for day-to-day transactions, 67 per cent prefer to talk to someone about more complex matters.”

Bank branches are particularly used to open new accounts, for financial advice, to trade securities such as mutual funds and to apply for mortgages and loans. Business banking is particularly affected without access to branches, not only for negotiating loans and mortgages but for making daily cash deposits and withdrawals. A recent survey showed that “76% of consumers in the U.S. and 85% in Canada prefer to visit a branch.” for major transactions and over 80%  of customers thought branch banking  was the most trusted means of banking in both Canada and the U.S.[20] Canada and the U.S.[21]

Figure 5: Most trusted channels for bank transactions according to consumers in the US and Canada, Q2, 2010

Figure 6: Channels US consumers use to apply for retail financial products

Canadian banks have some of the highest rates for account fees

High fees are another of the problems of our present banking system. In 2010, Vision Critical (commissioned by ING Direct bank before it was bought by the Bank of Nova Scotia and renamed Tangerine) showed that banking fees in Canada were among the highest in the world with more than half of Canadians (55%) on average, paying $185 per year.[22] Since that time fees have only gone up. Also variable fees have also risen steeply: “A nominal rise of 46 percent was observed in the average price for variable transactions from 2005 to 2013. In 2005, the variable fees charged by financial institutions ranged from $0.50 to $0.75 per transaction. By 2012, variable fees ranged from $1.00 to $1.50 per transaction. For example, in 2005 financial institutions charged from $0.50 to $0.75 for each banking machine transaction made outside of a consumer’s chequing account plan. By 2013, they were charging from $0.65 to $1.50, a nominal increase of 51 percent.”[23] In 2016 the fee at TD was $2.00 at non TD ATMs on the mid range account and for RBC the fee was $1.50.

The Unbanked

Estimates of the size of the unbanked population in Canada, with no accounts, range from 3 per cent to 15 per cent. [24] But the unbanked and the underbanked still have to use banking services which the banks are not providing to them. One of the major sources of cheque cashing and small loans to the unbanked are the payday loan companies. It is estimated  that between 1.8–2.5 million households in Canada rely on payday loans each year for around $2.5 billion dollars in credit.[25] The Canadian Payday Loan Association claims there are now some 1459 payday loan outlets or on-line companies.[26]

Since the federal government in 2006 downloaded responsibility for the management of payday loans to the provinces, things have only become worse for many borrowers with each province fixing their own interest rates. The FCAA (Financial and Consumer Affairs Authority) estimates that across Canada interest rates for payday loans are between 442% to 650% per year. [27] Another study estimates these rates are much higher at 620%-912%. [28]All studies show that these rates are what can be only called usurious and loan costs are most often billed to the worst off financially in our population. The federal maximum loan rate is set at 60% (which is already too high) but nowhere near the payday loan rate. 

The major growth in the last few years has been on on-line payday lending companies such as Wonga which can outflank provincial regulation. No wonder Canada is a very profitable payday loan location. The largest payday lender company Dollar Financial (Money Mart in Canada) has a profit margin of  49% in Canada, compared with 24% in Europe and 25% in the U.S. [29]

 

Indigenous Communities have few banks or credit unions

There are according to Statcan over 600 First Nations bands[30] and over 961 inhabited reserves in Canada.[31] This does not include Métis and Inuit communities or non-status Indigenous population. But there are today only about 59 bank branches[32] and 2 credit unions in Indigenous communities (including First Nations, Métis and Inuit). This means that most Indigenous communities are not well served in terms of banking services. On the other hand, there are many more Post Office outlets in these communities that could also offer financial services.

Immigrant communities are poorly served by banks’ high remittance costs

Each year billions of dollars are sent out of Canada as remittances to their countries of origin mainly by immigrant workers in Canada. A study in 2014 estimated the amount was $24 billion per year.[33]

The cost of remittances is high. The World Bank tracks estimates that sending $200 from Canada to the Philippines will cost on average an extra $10.40 in fees through a bank or $8.70 in fees if sent through a money transfer operator.[34]

(4) A postal bank can be quickly put into place because Canada Post already has the infrastructure, the staffing and the products and technology to adapt to offering a wider range of financial services.


History of Postal Banking in Canada 1868-1968

Canada already had a postal bank for 100 years. Canada’s postal savings bank was one of the oldest postal banks in the world just after the British one was established.  Postal banking was instituted just after Confederation in 1867 and was initially very successful with millions in assets and tens of thousands of customers.

This system began operating in 1868 with 81 locations and grew quickly. By 1884, there were 343 post office savings banks, with a balance of $13 million from almost 67,000 accounts. In 1898, the chartered banks successfully lobbied the government to reduce the interest rate paid on deposits at postal savings banks from 3% to 2.5%. They also worked to eliminate advertising by postal banks. As time went on, chartered banks and credit unions increased their presence in communities and the post office and government became less interested in maintaining the network.

At the same time in 1968 as the US Post Office closed its banking services, Canada also did rather than improving and modernising the service. The original regulations governing the Postal Savings Bank remain on the books in Canada.[35]

Advantages of Canada Post for Delivering Banking Services

Present day Canada Post has built in advantages for delivering increased financial services.

1) Many communities in Canada have a postal outlet but no (or limited) banking services as we have shown above. There are about 6,300 postal outlets present in most Canadian communities, the largest retail network in the country.

2) Canada Post has a high trust factor among the Canadian public. Nine out of 10 Canadians have a favourable or somewhat favourable impression of Canada Post, and seven out of 10 are satisfied overall with Canada Post.

3) Canada Post already has an existing skilled and stable workforce that would be open to skills upgrading. Canada Post has a large and skilled workforce of 64,000 employees in 2015.[36] Door-to-door delivery means that postal workers could also handle banking at the door when needed.

4) Post offices across Canada are already linked together by high quality Internet services as well as secure delivery mechanisms.

5) Canada Post already delivers a number of financial services. These include

    • the epost service which can be used to pay and receive bills.
    • Moneygram services to send money orders.
    • Vancity prepaid and reloadable credit cards
    • Prepaid Visa and Visa gift cards

6) Long opening hours Most Canada Post outlets are already open five days a week and many 6 or 7 days a week. All could operate longer daily hours than 9:00 a.m. to 5:00 p.m. Many postmasters have already complained about the reduced opening hours of their bank or credit union financial service outlet which is now often open only a few days a week while the post office was open the full 5 day week.[37]

7)  A new postal bank could use federal government banking experience. The federal government already has significant experience in the financial industry which it could share with a postal bank. These banks could also deliver some of these services through the postal bank which would greatly expand their points of contact.

Business Development Bank of Canada (BDC) already has 100 business centres which lend to business. It loaned over $4.7 billion in 2015 and made a profit of over $490 million. [38]

Export Development Canada could help companies seeking export help. It made $925 million net income last year.[39]

Farm Credit Canada has another 100 offices across Canada. It has $27 billion in over 147,000 loans and made a profit of $938 million last year.[40]

Canada Savings Bonds manages $6 billion in bonds and sells $$1.5 billion a year.[41]

What kind of services could be offered by a postal bank?

Postal banks can fill the gaps that we have shown the traditional banks and credit unions have and could offer special services to:

1) Regions (such as rural and inner city) not, no longer, or poorly served by traditional banks and credit unions including all citizens but also rural and inner city businesses. Canada is largely an urban country with over 80% of its citizens living in big urban centres. With no banking in many rural areas, this urban concentration will only increase.

2) Municipalities, aboriginal governments and social housing organizations All these governments and NGOs need a lender who will concentrate on their particular needs.

3) Low income customers and those excluded from traditional banks Since most banks and credit unions do not seem interested in supplying the kind of products that low income citizens needincludingpayday loans at reasonable interest rates the kind most people pay on their low rate bank credit card or line of credit, postal banking could offer these kinds of products.

4) Indigenous peoples in partnership in providing all kinds of services.  As we noted most Indigenous communities whether First Nations reserves, Métis communities or Inuit communities in the North do not have banking services. And yet Indigenous peoples are the fastest growing segment of the Canadian population.

5) Immigrant communities could be helped by providing no or low cost remittance products for people sending money back to their family’s country of origin.

6) Environmental services Postal banking could help make post offices hubs of community power by offering affordable loans to boost renewable energy development, including energy-saving retrofits.

7) NGOs and social economy organizations including co-ops, mutuals etc.  Traditional banks have always had a general difficulty in dealing with organizations based on a not for profit basis or based on community ownership rather than family or shares.

New financial services could be offered and old ones expanded

    • Withdraw and deposit with Interac from any bank
    • Chequing and savings accounts at best rates
    • Savings products such as Canada Savings Bonds, GICs etc.
    • Low interest credit cards
    • Debit cards and prepaid debit cards
    • Mortgages for homes and businesses
    • Business and consumer loans some through BDC, Farm Credit Canada, and EDC
    • Insurance products
    • Low fees or no costs for out of country remittances
    • Travel exchange funds such as US dollars
    • Mutual funds and stocks
    • Short term loans to replace payday loans but at interest rates at credit card rate
    • Joint mortgages: allow several unrelated persons to purchase a house by pooling income
    • Aboriginal mortgages (based on home value not on communally owned land)
    • Special attention to municipalities and social housing. Develop an expertise in lending to municipalities as well as social housing organizations
    • Special services for NGOs and Social Economy organizations such as co-operatives and mutuals who often fall through the cracks of traditional lenders profile on what a borrower should look like when ownership may be made up of co-op members


Special new services could also be offered

All of these services can be facilitated at local post offices but also by using Skype and Facetime contact with specialists and regular visits of specialists to local post offices.

At the national level we would require more staff but much less than you might think. The British Post Office Vice-president for financial services said in an interview he had 300 financial specialists to look over the management of financial services in over 11,000 post office locations. [42]

How postal banking could work here

Several possibilities exist here as to how the Post Office banking services could be managed. The core bank would be a wholly owned subsidiary of Canada Post. Services could be delivered by it or some by credit unions and banks with which it signs partnership agreements, or through existing federal financial organizations.

 

(5) A postal bank could become part of the transformation of the post office branch into a real centre for delivering community power.

A post office location offering banking could be able to help in the environmental revolution needed by offering loans for environmental refit for housing and businesses.

The Delivering Community Power[43] proposal for transforming the postal network sees postal banking as a key element in making post office outlets the hub in communities for environmental transformation offering charging stations for electric vehicles. The post office could offer “one-stop support for clean energy grants, energy-efficient heating systems, green power generation and cost-saving retrofits” and postal banking plays a key role in this project.

 

(6) A postal bank already has widespread support across Canada.

Hundreds of municipalities support postal banking. Polls show so do a majority of Canadians. Canada Post management in the past has also been in favour of financial service expansion and a secret CPC management study appears to endorse postal banking.

Over 600 Municipalities already have passed resolutions in council supporting Postal Banking. These include big cities such as Toronto, medium size cities such as Victoria and Lethbridge as well as hundreds of small towns such as Mont Laurier Quebec. The full list can be found as in Appendix B. [44]

It is not only the postal unions, CUPW and CPAA which support postal banking. Canada Post management until the current CEO have generally been in support. Former Presidents and CEOs of Canada Post from the first president Michael Warren, to André Ouellet and Moya Greene, have all endorsed the idea of Canada Post getting much more involved in financial services. Michael Warren, President of Canada Post from 1981–85, said before the Rotary Club of Ottawa in 1982: “We have post offices in more than 2,000 communities where there are no banks.... We could consider providing any number of services that would benefit from a widespread retail network...perhaps an indirect role for the chartered banks on a fee for service basis. We may also have a part to play in the catalogue sales business or in travel... maybe insurance.”[45]

In 1998, before the House Standing Committee on Finance, Mr. Ouellet also supported the idea of postal financial services. “ ...as the numbers have been indicated to you, there are still a lot of areas in Canada that are not covered (by banks). If the movement is to close more branches, that will mean that fewer and fewer Canadians will have direct access. We have come here to tell you not to forget that Canada Post used to provide this service. We could do it again by just enacting the dormant section. You don’t even have to amend the Canada Post Corporation Act. The section is there that would allow us to do it. You just re-enact the section and we will resume receiving deposits, as we used to do in the past.”[46]

In April 2010, Canada Post CEO Moya Greene who is now the head of the British Royal Mail company went before the Senate Standing Committee on Finance to say:” ...we also need to diversify the revenue stream and be in wholly different businesses than we are today. I note, for example, that many postal administrations have made a success of banking...” Ms. Greene cited the success of New Zealand. “We have seen New Zealand, where they started offering banking services in 2002, and by 2009, it was probably 30 per cent of their revenues and 70 per cent of their profit.”[47]

Public support

Almost two out of every three respondents (63%) to a 2013 Stratcom poll supported Canada Post expanding revenue-generating services, including financial services like bill payments, insurance and banking.[48]

Canada Post management study supports postal banking

But it is not only past management which has supported postal banking. In fact, Canada Post conducted a secret four-year study[49] on postal banking that indicates that adding this service "would be a win-win strategy" for the corporation. Obtained though an Access to Information (ATI) request, 701 of the study's 811 pages were redacted.

 “Secret Canada Post files obtained by Blacklock’s show executives rated postal banking a “win-win” before cabinet apparently killed the scheme in favour of drastic rate hikes and service cuts this winter.”[50] One management report was entitled “Banking: A Proven Diversification Strategy”.

The report showed “Data concluded banking was a proven money-maker, accounting for 13 percent of profits for the U.K. post office; 25 percent for Australian post; 30 percent for France’s La Poste; 54 percent in Switzerland; 71 percent at New Zealand Post Group’s Kiwi Bank; and 78 percent of profits for Italy’s Banco Posta..”

Rather than underlining any major risk to Canada Post, instead the study urged “Canada Post executives to weigh “the size of the prize”, according to the report Banking: A Proven Diversification Strategy”

 

 

Recommendation: That the Standing Committee recommend the addition of postal banking at Canada Post, with a mandate for financial inclusion.

Recommendation: That Standing Committee  recommend that Canada Post release the study of postal financial services.

 

 

 


[1] http://www.uniglobalunion.org/sites/default/files/pictures/post/globalpanoramafinancial_inclusion_-upu_-en.pdf

[2] World Banks Rankings http://www.accuity.com/useful-links/bank-rankings/

[3] Canada Pension Plan Investment Board Invests Rmb 3.2 Billion (Us$500 Million) In Postal Savings Bank Of China, Dec. 25, 2015 http://www.cppib.com/en/public-media/headlines/2015/cppib-psbc.html

[4] Rahul Shrivastava, “Post Offices To Operate As Banks, Network To Be Largest In World: Government

June 1, 2016, http://www.ndtv.com/india-news/post-offices-to-operate-as-banks-network-to-be-largest-in-world-government-1414470?site=full

[5] Postal Services of Portugal to open CTT bank, Xinhua, Nov. 19, 2015 http://news.xinhuanet.com/english/2015-11/19/c_134834641.htm

[6] Andrey Ostroukh, Russia’s VTB Creates New Retail Bank in Joint Venture With Russian Post, Wall Street Journal,

Jan. 28, 2016, http://www.wsj.com/articles/russias-vtb-creates-new-retail-bank-in-joint-venture-with-russian-post-1453989359

[7] Poste Italiane Annual Report 2015, http://www.emarketstorage.com/storage/20160415/20160415_14380.6096626.pdf

[8] Annual Report Banque Postale 2015, https://www.labanquepostale.com/content/dam/groupe/actus-pub/pdf/publi-instit/ra2015/RA-LBP-2015.pdf

[9] “Postal bank­ armed with iPad, postman will be your banker

Soon”, June 2, 2016, The Economic Times, http://economictimes.indiatimes.com/industry/banking/finance/postal-bank-armed-with-ipad-postman-will-be-your-banker-soon/articleshow/52548980.cms

[10] Canadian Tire Corporation, Annual Report 2015, http://s2.q4cdn.com/913390117/files/doc_financials/annual/2015/Canadian-Tire-Corporation_2015-Annual-Report_ENG.pdf

[11] “Canada's big banks earn $35B in profits for 2015”, CBC News, Dec. 3, 2015 http://www.cbc.ca/news/business/bank-profits-rise-1.3348661

[12]http://democracywatch.ca/20130305-ccrc-calls-for-key-bank-accountability-measures/

[13] Canadian Bankers Association, Fast Facts about Canadian Banks, 2016, http://www.cba.ca/en/media-room/50-backgrounders-on-banking-issues/467-fast-facts-the-canadian-banking-system

[14] Desjardins Annual Report 2015, https://www.desjardins.com/ressources/pdf/d50-rapport-annuel-mcd-2015-t4-e.pdf?resVer=1458666816000 and Caisses populaires acadiennes, http://www.acadie.com/en/contenu.cfm?id=2057

[15] John Anderson, Why Post Offices Need to Offer Banking Services, CPAA, September 2014,  http://cpaa-acmpa.ca/pub/files/banking_services_SEPT23Eng.pdf

[16] ibid

[17] Canadian Bankers Association, How Canadians Bank, July 2015 http://www.cba.ca/en/media-room/50-backgrounders-on-banking-issues/125-technology-and-banking

[18] David Berman, “Bricks, mortar and beyond”,  The Globe and Mail, Aug. 29, 2015 http://www.theglobeandmail.com/report-on-business/canada-bank-branches-disruption/article26150646/

[19] Ibid for all bank references

[20] Studies cited in John Anderson, Why Canada Needs Postal Banking”, https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2013/10/Why_Canada_Needs_PostalBanking.pdf

[21] Studies cited in John Anderson, Why Canada Needs Postal Banking”, https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2013/10/Why_Canada_Needs_PostalBanking.pdf

[22] Liam Lahey, “Canadians pay $185 a year in banking fees among world’s highest”, March 20, 2012 http://smallbusiness.yahoo.com/advisor/blogs/insight/canadians-pay-185-banking-fees-among-worldhighest-191158887.html

[23] Charles Gibney, Sami Bibi and Bruno Lévesque, Research Division Banking Fees in Canada: Patterns and Trends, Financial Consumer Agency of Canada, June 2014 http://www.fcac-acfc.gc.ca/Eng/resources/researchSurveys/Documents/BankingFees-FraisBancaires-eng.pdf

[24]Dr. Paul Bowles, Keely Dempsey and Trevor Shaw,  Fringe Financial Institutions, The Unbanked, and the Precariously Banked:Survey Results From Prince George, B.C., University Of Northern British Columbia, Report Prepared For The Aboriginal Businesss Development Centre,  September 2010 http://www.nccah-ccnsa.ca/docs/nccah%20partner%20documents/abdcreportoct15.pdf

[25] Brian Dijkema and Rhys Mckendry, Banking on the Margins: Finding Ways to Build an Enabling Small-Dollar Credit Market, Cardus, 2016, https://www.cardus.ca/research/workandeconomics/publications/

[26] Tavia Grant and Janet Mcfarland, Payday loans: Predatory loan sharks or crucial fix in a pinch?, The Globe and Mail, May 15, 2015 http://www.theglobeandmail.com/report-on-business/payday-loans-predatory-loan-sharks-or-crucial-fix-in-a-pinch/article24463029/

[27] http://www.fcac-acfc.gc.ca/Eng/resources/publications/creditLoans/Pages/PaydayLo-Precirct-2.aspx

[28] Brian Dijkema and Rhys Mckendry, Banking on the Margins: Finding Ways to Build an Enabling Small-Dollar Credit Market, Cardus, 2016, https://www.cardus.ca/research/workandeconomics/publications/

[29] Tavia Grant and Janet Mcfarland, Payday loans: Predatory loan sharks or crucial fix in a pinch?, The Globe and Mail, May 15, 2015 http://www.theglobeandmail.com/report-on-business/payday-loans-predatory-loan-sharks-or-crucial-fix-in-a-pinch/article24463029/

[30] Aboriginal Peoples in Canada: First Nations People, Métis and Inuit, Statcan, 2011, https://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-011-x/99-011-x2011001-eng.cfm

[31] Area of residence - On reserve, Statcan 2011 https://www12.statcan.gc.ca/nhs-enm/2011/ref/dict/pop150-eng.cfm

[32] From web sutes of major banks and First Nations Bank as well as credit unions

[33] Douglas Todd, Remittances: $24 billion a year sent home from Canada, Vancouver Sun,  July 30, 2014 http://www.vancouversun.com/business/Remittances+billion+year+sent+home+from+Canada/10080290/story.html

[34]  Laura MacNaughton and Renee Filippone,“Loonie's plunge hits families of immigrants who send money home”, CBC News, Jan 15, 2016 http://www.cbc.ca/news/business/sending-remittances-low-dollar-1.3404145

[35] The Post Office Savings Bank Regulations, http://laws-lois.justice.gc.ca/eng/regulations/C.R.C.,_c._19552561/page-2.html#docCont

[36] Canada Post Annual Report 2015 , https://www.canadapost.ca/assets/pdf/aboutus/financialreports/2015_ar_overview_en.pdf

[37] John Anderson, Rural Canada is underserved by financial services, CPAA

Why Post Offices Need to offer banking services, 2014

http://cpaa-acmpa.ca/pub/files/banking_services_SEPT23Eng.pdf

[38] Business Development Annual Report 2015, https://www.bdc.ca/en/documents/annualreport/BDC_AnnualReport_2015.pdf

[39] EDC Annual Report 2015, http://www1.edc.ca/publications/2016/2015ar/files/EDC_AR2015_E-Web.pdf,

[40] Farm Credit Canada, Annual Report 2015, https://www.fcc-fac.ca/fcc/about-fcc/corporate-profile/reports/annual-reports/annual-report-2014-15.pdf

[41] Canada Savings Bonds, Canada Savings Bonds Program - Annual Sales and Retail Debt Outstanding, http://www.csb.gc.ca/2015/10/canada-savings-bonds-program-annual-sales-and-retail-debt-outstanding/

[42] John Anderson, Why Canada Needs Postal Banking, CCPA, 2013

[43] Delivering Community Power http://www.deliveringcommunitypower.ca/

[44] http://www.sttp.ca/en/campaign/resources/municipalities-and-related-bodies-have-passed-resolutions-support-postal-banking

[45] John Anderson, Why Canada Needs Postal Banking, Canadian Centre for Policy Alternatives, 2013 https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2013/10/Why_Canada_Needs_PostalBanking.pdf

[46] ibid

[47] ibid

[48] ibid

[49] Tom Korski, Canada Postal Banks “Win-Win”, Secret Records Show, Feb. 10, 2014 https://www.blacklocks.ca/canada-postal-banks-win-win-secret-records-show/

[50] ibid

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